Brent sheds more than 5.5% on fears of new Covid-19 strain

Brent crude continued to fall on Monday, dropping more than 5.5% and pulled back from its 9-month high, while on the verge of the first daily loss in 6 days on correction and profit-taking, in addition to renewed global demand concerns, after the United Kingdom identified a new coronavirus strain that spreads more quickly.

Brent fell 5.5% to $49.22 a barrel, after opening at $52.24 , with a high of $52.28.

Brent crude futures rose 1.5% on Friday, posting the fifth straight daily gain and hit a 10-month high of $52.46 a barrel

Oil prices gained 5% during the past week week, in the seventh straight weekly gain and the longest weekly gaining streak since March 2019.

These gains came based on the positive developments about the Covid-19 vaccines, while concerns about the US oversupply eased, and the sharp drop in the US dollar.

Oil prices fell sharply as the week kicks off, after the United Kingdom identified a new coronavirus strain that spreads more quickly, which renewed concerns about the tightening of global lockdowns, and their impact on the demand for fuel.

The British government announced a tighter lockdown in  London, and other parts in the southeast, after a spike of the Covid-19 virus infections.

Some reports suggest that the new Covid-19 strain could be up to 70% more transmissible than the original strain, and the World Health Organization said that the new strain is expected to be in other countries, including Denmark, the Netherlands and Australia.

France, Germany, Italy, Ireland and the Netherlands have suspended flights coming from the United Kingdom, to prevent the new variant from spreading in their lands, which was followed by a similar move from Canada, Saudi Arabia and other countries.